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imported>Doug Williamson |
imported>Doug Williamson |
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| This theory predicts that the spot foreign exchange rate will change over time to reflect and offset differences in interest rates in the respective currencies.
| | A desire to hold money to allow an individual or firm to take advantage of potential investments which offer a higher rate of return. |
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| So for example, unhedged currency depreciation losses will on average negate and match exactly any gains on interest differentials between the two currencies.
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| == See also == | | == See also == |
| * [[Carry trade]] | | * [[Liquidity preference]] |
| * [[Depreciation]]
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| * [[Expectations theory]]
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| * [[Fisher Effect]]
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| * [[Four way equivalence model]]
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| * [[Interest rate parity]]
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| * [[International Fisher Effect]]
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| * [[Purchasing power parity]]
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| * [[Spot rate]]
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| [[Category:The_business_context]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Cash_management]]
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| [[Category:Financial_products_and_markets]]
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| [[Category:Liquidity_management]]
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Revision as of 14:30, 9 June 2016
A desire to hold money to allow an individual or firm to take advantage of potential investments which offer a higher rate of return.
See also